As part of the government’s efforts to recognise the value that apprentices bring to the economy as a whole, the Plan for Jobs includes a number of incentives that employers should be aware of. The deadline for these incentives has recently been extended so that it now applies to each new apprentice taken on before the end of January 2022.
The reasoning behind these incentives and the deadline extension is to provide extra support for employers, allowing them to increase capacity post COVID-19. They also provide high-quality apprenticeship opportunities for individuals entering the job market that equip them with in-demand skills.
Here, we explore the incentives in detail and assess how they can benefit employers directly.
What are apprenticeship incentives?
The government apprenticeship scheme entitles all employers who take on new apprentices to £3,000 as a cash incentive. This is on top of an existing £1,000 incentive that applies when taking on apprentices aged 16 - 24 (other conditions also apply).
What can apprenticeship incentive grants be used for?
Essentially, you can spend incentive grants on anything deemed to support your business or organisation’s costs. However, there are recommendations in place that the funding be used to add as much value as possible to the apprenticeship scheme. In this case, a better overall learning experience will benefit your business in the long term.
The incentives can be used for things like:
- Specialist equipment
- Travel costs for your apprentice
- Any relevant licenses that may be required
- Additional training that supports strong continuous professional development
- Memberships to professional bodies or industry associations
- Subscriptions to relevant industry publications
A performance-based bonus scheme
Who is eligible to receive the apprenticeship incentive?
The apprentice incentives are available to employers that have a workforce in England and who recruit apprentices before 31 January 2022 (STC). So long as the eligibility requirements below are met, there is no limit on how many apprentices you can hire and therefore incentive payments you receive.
To be eligible for the payments you must meet the following criteria:
- Newly hired apprentices must be a new employee
- There must be a contract of employment in place for the apprentice starting on or before 31 January 2022
- The new apprentice must not have been employed by your business within the last six months
Can you continue claiming existing payments?
Yes. These new incentive payments are in addition to payments already available from the government that help businesses cover the costs of hiring 16 - 18 year old apprentices or 19 - 24 year olds who have previously been in care or have a Local Authority Education, Health & Care Plan (EHCP).
Any employer who takes on new apprentices that fall into the above category would still be able to claim the £1,000 available. This would be on top of the Apprenticeship Incentive meaning you may be eligible for a total of £4,000.
You can read our in-depth employer guide to apprenticeships for more information about apprenticeships with ICAEW and how your business can benefit.